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Despite Massachusetts Forum-Selection Provision, Court Rules Case Belongs in California

Overriding a Massachusetts forum-selection provision found in an employment agreement, Judge Salinger ruled in Oxford Global Resources, LLC v. Hernandez that an employer’s litigation against a former employee belonged in California, not Massachusetts.

Oxford Global Resources, LLC (Oxford), a recruiting and staffing company based in Massachusetts, hired Jeremy Hernandez to work in its California office. Oxford commenced suit in the BLS, alleging that Hernandez breached his “protective covenants agreement” with Oxford by using information about the identity of Oxford’s customers to solicit those customers on behalf of a competitor in California. The agreement contained a choice-of-law provision providing that Massachusetts law governed the contract. The agreement also included a forum-selection provision specifying that the parties had to bring any suit arising from the contract in Massachusetts.

Hernandez moved to dismiss the case, arguing that the litigation belonged in California where he lives and works. Judge Salinger allowed the motion. In reaching his holding, Judge Salinger ruled that, despite the contract language, California was the appropriate forum for the litigation.

Judge Salinger began his analysis by finding that the choice-of-law provision was unenforceable and ruling that California law governed the contract. The agreement, according to Judge Salinger, was “a contract of adhesion” because “Hernandez had neither the opportunity nor the bargaining power to negotiate over whether California or Massachusetts law would govern.” Moreover, “the choice-of-law provision was an attempt by Oxford to circumvent California’s strong public policy against the enforceability of non-competition agreement.”

Judge Salinger next ruled that the forum-selection provision was unenforceable. “[T]he evident reason why Oxford sought to make the Agreement subject to Massachusetts law and require that any lawsuits arising from the contract be brought in Massachusetts,” Judge Salinger wrote, “was that Oxford wanted to keep Hernandez from enforcing his rights under California law not to be subject to a broad noncompetition agreement that barred any solicitation of Oxford’s former or prospective customers.” Those circumstances, according to Judge Salinger, violated California public policy.

Judge Salinger wrapped up his decision by considering the proper venue for the litigation. Judge Salinger noted that the state courts in California constituted “an adequate alternative forum,” that “all relevant events occurred in California and all of Oxford’s alleged harm or injury was incurred there,” and that “California has a much stronger interest than Massachusetts in deciding whether Hernandez breached his contract or committed a tort.” Judge Salinger therefore concluded “it would be unfair to compel Hernandez to defend himself in Massachusetts and that justice would best be served by dismissing this action so it may be tried in California.”

Oxford Global Resources, LLC v. Hernandez

June 9, 2017

Full decision here.

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